can reseed the minute you say that, they're looking were to put the money. i do, that happened. >> this is somewhat partisan, so excuse me. i'm going to step into my democratic hat. in georgia, all levels, people are not standing up and saying here is one -- here is what is being cut. there has been eight years where it has been the "don't hurt" party. this program we have to protect, do not cut it. now the debate is on what programs to save. there is very little left, and i think it is focusing on bringing out cost savings. they automatically when to cut more things. -- automatically wants to cut more things. >> doing more for your money is more positive to engage than

cost savings. we do have very real worries given so the state political dynamics. legislators understand the idea of the value. you're not taking money away, you're getting more for your money and using it more efficiently with that is giving more services to more people or delivering services differently in a better way. then, when you are fighting budget cuts, personalize and set of talking about the thousands of people who will be heard, fined three people with a very sympathetic case and say this is not going to harm a random number on a page, this is going to harm maria and her family. here is her story. it is much easier for people to identify with. >> i think leases summary was great. -- i think lisa's emery was great. i would not underestimate the power of physicians. in the florida, we have white coat it.

all the men and women come in their lab coats and walked into the state capital. you guys are uniquely good at having, i think, impact against legislators. here is the trouble. it can get very hard. you're paid by the hour. it is very, very hard. you have your own tough times to have people to take a day or two off to go to the state capital. it hurts patient responsibilities and others. when it has been done in pennsylvania and florida and other states, the legislators say it was very powerful. there were up 2000 physicians there on that day. again, you are here. you're sitting all day in the room with no windows. i know you folks personally have made that commitment, but again, i want to in my thoughts with what i have said. we're at this once in a

generation window. this is a unique time where there is an enormous amount of state. -- the enormous amounts at stake. i was opposed and i did a lot of work against the clinton plan. i never ever presumed that i thought it was a bad plan. i felt comfortable with what i did. i never presume it was going to be 15 or 16 more years before the window open again. i learned my lesson. as i said, because by the way, elected officials do not like getting stomped on. so when healthcare does not work, they say to hell with it. if that happens again and is the outcome, he will not come back to the next year. it will drop and it will drop until we have the next combination of health care and economy and large majorities that we have already seen. harry truman and this and this,

it is a once in a generation window and it is open right now. whatever happens sets the tone for arguably the next generation. >> i think that is inappropriate notes to and on, a call to action. if there are some people in the audience left to the press or pessimistic about this, i have a large supply of antidepressants with me. [laughter] >> the other thing among to say is people say oh, you are so cynical. lookit, americans can be informed but they're not stupid. we are in a partial system that works in a country that works. change is possible. i was raised in the 1960's. it being elected is a powerful proof of what this country can accomplish. i never, ever, ever, i get less

cynical about this country and its ability to change. >> that is an even better known. [applause] -- that is an even better note. >> thank you all for listening and we might well move on to the next panel. thank you, panelists. [applause] what's ladies and gentlemen, our next session is health care reform for the future. we will focus on the challenges and opportunities. >> to date on "newsmakers" we discussed the issues on the agenda including health care and preparing for the hearings for supreme court nominee judge sonia sotomayor or.

>> she thinks you can interpret the constitution by looking to see what public opinion is in europe. public opinion in europe has nothing whatsoever to do with what our constitution means. is that is really her point of view, that is very troubling. i could not vote for judge who believe that. she has said it on several occasions for a i'm going to have to ask her what she means by that. when people talk about a filibuster, understand that republicans not filibuster this on our own. there are not enough of us. by the way, none of us are talking about a filibuster. it is only response to questions by the media. we're not proposing this. as you pointed out, it would be very difficult for us to point out -- to pull off anyway. that is today at 6:00 p.m. eastern here on c-span.

>> the government funding of college and a direct aid to colleges and their students is a late 1950's early 1960's thing. >> hillsdale college is never accepted government funding. >> title iv is 400 pages long. we have a lawyer in town who tries to keep them from giving us money. i asked him to send it to us, but he said there was no use. >> larry arnn tonight or listen on xm satellite radio or download the podcast. >> and treasury secretary timothy geithner was on capitol hill talking about the budgets for the treasury department and the irs. also at the meeting was the ira's chairman.

this is the appropriations subcommittee. this is about 90 minutes. >> thank you for joining us this morning. we know the irs chairman is also here and prepared to testify. i'm going to waive the remainder of my opening statement in the interest of time. >> secretary geithner, i am very pleased to welcome you to this hearing. i think you for your service to our nation. -- i thank you for your service

to our nation great u.s. only responsibilities that is difficult to know where to begin. you are responsible for reinvigorating bank lending to consumers and small businesses, stabilizing the housing markets, overseeing the automobile industry and encouraging sustainable economic growth. most importantly, you must try to protect american taxpayers and their investments and promote the long-term financial security of the united states during a time of unprecedented debt. the current financial crisis is rooted in a tangled web of high- risk financial instruments backed by high-risk loans issued by harris individuals. to emerge from this crisis and to overcome its facts, we must restore and trust in our nation's financial institutions and financial markets.

in my view, that will require significant reforms in our system of financial regulation. i wanted to discuss with you today several developments that are shaking americans trust in the economy. first among these is the dangerous increase in our nation's long-term debt. i supported the short-term fiscal stimulation that is necessary to get our economy back on track. i am troubled that the president's budget proposes to double the debt in five years and a triplet in tenge. i am concerned -- and triple it in ten years. where will the money come from to pay these debts? china, of where you have recently visited? saudi arabia? will the public about -- public

borrowing crop private investments and slow down the recovery? who will ultimately pay for this? our children and grandchildren? we need to assess what we're doing to our country's long-term financial health? i remain very concerned, as i indicated to you in our conversation yesterday, about the management accountability and transparency of the tarp fund. originally, it was envisioned as a fund to prevent our largest banks and financial institutions from failing and to increase liquidity in our credit markets. today encompasses 12 from programs for banks, insurance companies, automobile manufacturers, and involves government funds combined with private funds adding it to almost $3 trillion. it is disturbing to me that we

really cannot assess what the impact of tarp funds has been. the treasury department has yet to articulate how it will measure whether this injection of capital has been an effective use of taxpayer dollars. i am concerned that we are being asked simply to trust that these large infusions of capital into the economy will lift us out of this severe financial crisis whose complex origins are still being untangled. secretary geithner and commissioner shulman, both based great challenges -- you both face the great challenges. the truly are extraordinary times and i'm going to work very closely with you and i pledge to do so as well as with our

chairman to make sure that you have the staff, the authority, and the resources that you need to serve the american people. thank you, mr. chairman. >> i invite my colleagues to make a brief opening statements. >> thank you very much, mr. chairman. you have taken on a great task. so far, i think the ball game is certainly going your way, but we're quite a distance from the end. as we meet today, the economy is slowly beginning to show signs of a possible recovery. the challenges still remain. this recovery will require more to get on a firm footing. we need to give our regulators the tools they need to get back from this financial crisis. we have got to change the corporate culture.

it says that the people, the leadership at the top, they can often take its compensation without regard for what happens with the employees for the future investing for the well- being of their company. i am still on the board of columbia business school. sometime ago i gave them a chair. i took a hiatus. what i proposed was that salaries at the top be related to salaries at the bottom. instead of letting the ratio slipped as it has a from 40 times to 400 times recently, also, mr. secretary, i do not know what kind of latitude you

have or what authority you have to suggest conduct in a ceo's office. i think that's one thing we have to look at when we change the corporate culture to make it clear that when an executive retires that the reward want to be, in my view, the performance of the company after the leader leaves and the bonuses should be expanded as time goes on. it should not just be related to stock price because stock price might be expensive in investing in the future of the business. i urge you to carry on. thank you. >> senator nelson. >> secretary, we're glad you're here and we appreciate the

efforts that you are providing and the progress that we hope will come. when i go home, i have people come up to me complaining about the bailouts, complaining about tarp, complaining about the auto industry and bankruptcy. they are all concerned about that. they're concerned about the growing deficit and the increasing budget. the one thing that they're becoming alarmed about is government ownership of stock trade will become to questions, i have a few about that because they come up to me and say that we are drifting into socialism at a rapid rate. i assured them that are goal is not to hold the stock holdings or warrants for any of your financial instruments that we should not be holding onto. our goal is to get these

companies so there functioning on their own so that their publicly traded or privately owned, but not the government owed. i'll be asking you for reassurance on that side. i hope and i believe that our goal is just as i have stated it, to get these companies get back on their feet and went on their feet to become private once again, not to have the kind of public ownership that we currently have. i went to get your take on that. thank you, mr. chairman. >> is good to have you here today. i have visited with you on several occasions and i look forward to today. we have just experienced over the last year the biggest economic downturn since the 1930 proxy. we have seen irresponsibility on wall street, irresponsibility in government with the lack of

regulation and in some cases no regulation. you are in the eye of the storm. i look forward to visiting with you about all those things that impact the economy and where we're going from here. i appreciate you coming in front of the committee. thank you. >> thank you very much, mr. chairman. welcome, secretary geithner. everyone knows over the past year that we have had a major economic storm raging, a great damage to everyone, the federal government. we responded to the crisis with aggressive and unprecedented, but unfortunately at hot, actions through taxpayer funded bailouts corporations to big to fail. -- but unfortunately ad hoc. we have seen some green shoots, but there are some wondering whether those will wither away.

consumer debt is remaining high , significant leverage is happening, and the lingering questions about the solvency of banks. are we seeing a dead cat bounce in the markets? economic recovery occur or be sustained and so we just the root cause of the crisis -- until we adjusted the root cause of the crisis. president obama told us in january that we cannot have a recovery until we get the toxic assets out. these are questions i want to follow up with. of the size of the stimulus is now causing questions from the federal reserve. if we get into the position of monetizing our debt, we are faced with an unprecedented disaster and tripling the debt

in 10 years seems to me to be a very risky approach. we have seen united kingdom which was recently warned about its credit rating. perhaps that is the canary in the coal mine for nations in the future. thank you, mr. chairman. >> mr. secretary, the floor is yours. >> members of the committee, it is a pleasure to be in front of you today. i would look forward to working a close working relationship with you and having a " -- and having a chance to answer the many important questions. we see some initial signs of economic improvement. i think you can say that the force of the storm is weakening. although the financial system is beginning to heal, our country faces very substantial financial challenges. the president and the

administration are working to meet these challenges. we're working hard to get americans back to work, our economy back on the path of growth, to committing to restoring fiscal discipline to sustain a recovery, and to make an omelet -- long neglected investments into education, energy, and health care, and to ensure we enhance the competitiveness of the u.s. economy. to achieve these goals, we're working to repair and reform our financial system so works for and not against recovery. we're working to restore a growth better disclose -- restore our fiscal goals. who wants to promote and ensure open market for more businesses. we want to protect our nation's national security interest to deploy all the tools at our disposal to exclude terrorists, proliferators, and other actors

from the international stage. double thereby secure our financial system and prevent threats to security. the fiscal year 2010 budget before you will allow the entry to pursue these core missions. this includes a 607 $6 million over the 2009 levels. -- this includes a $676 million increase. these offices, domestic finance and policy, are at the center of the administration's efforts to support strong design, rigorous analysis, improving financial systems, reform the financial system, and implements reforms to our tax policies and tax codes. we include in the budget day $137 they requested to more than double our community development to insure that the

development of our financial affairs reach beyond major banks and businesses to help economically distressed communities. these committees were affected before the crisis and had been deeply hurt by the business failures that the crisis has exacerbated. we propose a total of $332 million for new irs investments including new employees to combat offshore tax evasion and improve compliance with u.s. international affairs. another $130 million will go to bolster information technology for the irs and upgrade its fraud detection capabilities. not under the jurisdiction of the subcommittee, i want to note the funds are included to meet our international obligations to those crowds to help us craft

the economic system we live in today. as we see these additional funds to respond to our immediate challenges, we have cut back on some programs that are either ineffective or we believe to be delayed. just one example. even as we're trying to increase capital for the irs, our budget would reduce capital wide investment by 65%. that is a modest saving. i want to say a few words about the treasury staff. i have the honor of leading a team of the exceptionally smart and dedicated individuals to making our government more effective. they perform a great service to our country under challenging circumstances. every grateful to the great feeling that the scale of what we have set in motion just in the last six months, the have done extraordinary things in a short period of time. thank you, mr. chairman. i would be happy to answer any questions.

>> many -- mr. secretary, many of these will be policy questions, global in scope. i will try to bring this home to the actual budget aspects of this hearing as best i can. let me start with a topic he will not be surprised i am interested in -- a mortgage foreclosure. i have brought before the senate twice now, unsuccessfully, an attempt to change the bankruptcy code so that we can create more incentives for renegotiating mortgages to avoid foreclosure. i failed in both efforts. my last effort was opposed by virtually all of the banking institutions of the united states save 1, citigroup, that supported our efforts. the mortgage rate is a cessation reported that about 12.07% of loans were delinquent. that is the highest level ever recorded since the survey was launched in 1972. also, for the first time, most mortgages in the foreclosure were private loans -- were prime

loans. foreclosures bounced up 32% to 242,000 during the year over year period ending in april. the obama administration is making home affordable program has resulted in only 55,000 mortgage modifications over the last two months. according to "the washington post" will not be successful unless they addressed homeowners who owe more than their properties are worth. i sense that this was the catalyst that led us into the recession. it is my feeling that the previous administration, and so far this administration, has failed to come up with an approach that could dramatically turnaround this increasing number of mortgage foreclosures. one year ago, the estimate was 2 million. this year is 8 million.

ultimately, one out of every six, mortgages bases for closure based on current projections. do you agree that we need to strengthen incentives to modify mortgages to turn this economy around? would it not help participation for the treasury's own mortgage modification program? can you suggest a better method to give more homeowners more leverage to change the bankruptcy code? >> housing is at the center of this crisis. of course, many americans are losing their homes, including many who were very responsible and who are suffering simply because of the actions of those borrowers who lived way beyond their means and banks made it hard. i agree with you that i think this government should have moved earlier to address this crisis. we relate as a country and behind the curve. -- we were late as a country. the president's program does not

provide a very powerful set of incentives to reduce modifications. it is true we have been in office now almost six months, this program was laid out in only a few months ago. there's been a substantial increase in efforts we have put out, notification to potentially eligible borrowers, and buses -- expect to see a very acceleration of these modifications. -- this program does create incentives for progress. it also does reach homeowners better significantly under water. it will not reach all homeowners. there are some homeowners that simply borrowed and got themselves into the point where they have a completely understandable -- completely unstable mortgage. this is designed to reach those homeowners who have a negative

equity. the program has been successful in helping bring down interest rates working alongside the fed rate it has been successful in substantially increasing refinancing so morganton -- can take a vintage of those lower rates. which is beginning to see to encourage modifications. -- increasing refinancing to take advantage of these lower rates. our judgment is that this is the best package of incentives which offers the best return for the taxpayers' resources that we're going to use to address the housing issue. >> i would just say that i asked this question of your predecessor. i still remain skeptical that the voluntary approach to mortgage renegotiation is going to save us from this crisis that we're facing.